Analysis of methods to estimate the mean and variance of the willingness to pay: parametric and non-parametric case

Abstract Introduction: Contingent valuation (CVM) is the most significant direct method for estimating the total monetary value of ecosystem services. Aims: The parametric and non-parametric methods of estimation of the willingness to pay (WTP) were compared through the intervals of the mean, to give recommendations of use in the valuation of ecosystem services. Materials and Methods: In order to provide support for the comparison of the methods, two case studies that applied the CVM were used. Within the non-parametric approach, the mean and variance intervals obtained with the Boman, Bostedt and Kriström formulas were compared with those obtained by the Haab and McConnell method. Results and Discussion: The parametric and non-parametric methods can be used indistinctly to obtain the mean of the WTP, because no significant differences were observed among the estimated values. In non-parametric methods, the two approaches analyzed do not differ in the estimation of the mean, but there are differences when calculating the variances; the Haab and McConnell method generates relatively larger mean variances. Conclusions: It is recommended to use the non-parametric method as a complement or validation of the results of the parametric method, since the latter includes socioeconomic explanatory variables of the WTP.